Places like russia and chine benefit when foreign held dollars are unloaded.
I'm guessing that if it doesn't do that, short term treasury yields will spike, and they don't want that to happen?
Doesn't this make treasury yields meaningless? If they're subsided by the Fed, then it means that nobody but them will buy them, since this subsidy means that short term treasuries are noncompetitive with other asset classes.
What am I missing?
No, its not literally printing money. (That’a what happens in the big presses run by the Bureau of Engraving and Printing.)
It is arguably figuratively printing money, but that’s exactly one of the Fed’s primary tools to acheive its job, by design.
> Wasn't the Fed not supposed to be allowed to do that?
What gave you that idea?
Now, if you had evidence of the Fed making decisions on the basis of impact on budget fiscal balance rather than on the basis of balancing the tension in its “dual mandate” on full employment and price stability, then you’d have something the Fed wasn’t supposed to do. But money printing (in the figurative sense) is exactly one of the things that the entity handed the reigns of monetary policy under the law is supposed to use as a means to acheive its mandate.